Inflation Is Reshaping Gen Z Spending — 4 Trends To Watch
"Doom spending," a practice where people turn to shopping for comfort as a way to cope with the stress of inflation, has had quite an impact on Gen Z spending habits
Peter Tran, CPA, personal finance expert and senior contributor at Amortization Calculator, explained that he has seen stress drive Gen Z to make impulsive purchases for temporary comforts.
"I've had clients confide that the credit card bill later hits them harder than they anticipated, leading to more anxiety; the short-lived relief isn't worth the debt they accumulate," he said.
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But as inflation continues, Tran said he's observed Gen Zers starting to adapt and finding ways to stretch their wallets, which leads to healthier financial habits. Here is how Gen Z's spending habits are changing with inflation and how Tran has suggested they stretch their dollars even further.
1. Traveling Locally for Shorter Periods
While Gen Z still travels, trips are closer to home for shorter periods to save on airfare, hotel costs and even casual dining, says Tran. "It still offers a needed break without the high price tag."
2. Shopping in Bulk To Maximize Savings
Gen Z is discovering that buying groceries in bulk at wholesale clubs saves them more money in the long run. Tran said some clients bulk-prep their food and save more than they expected.
3. Finding Alternatives to Paying Full Price for Clothing
One item where Gen Z is cutting their spending is at clothing stores. Rather than paying full price, they're waiting for sales, as well as shopping at thrift stores and consignment shops to get better deals.
"Clothing purchases have dropped significantly in this group; many [Gen Zers] shop secondhand or wait for serious discounts, not because they hate trends, but because it's simply not worth paying full price under these conditions," said Tran. "They admit it's rewarding to see that extra money staying in their bank accounts."
4. Taking on Side Hustles To Make Ends Meet
Gen Z has helped offset their spending by finding part-time jobs and side gigs to boost their income. Tran said one person he worked with picked up freelance graphic design gigs and does occasional ride-share driving, providing a second income stream.
Spending Tips for Gen Z to Make the Most of Their Finances
To minimize financial risk, Tran recommended the following money-saving tips he's used to help Gen Z entrepreneurs make the most of their money in a time of inflation:
Track expenses carefully.
Set up automatic transfers to savings.
Check financial goals weekly.
Even a basic plan offers peace of mind and helps avoid drifting into overspending, noted Tran.
"I've walked Gen Z entrepreneurs through these steps, and they often say it's less intimidating once they see how the numbers fit together."
This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
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